2017 China CEO Outlook | KPMG | CN

2017 China CEO Outlook

2017 China CEO Outlook

2017 China CEO Outlook – Disrupt and Grow features China findings from a global KPMG CEO survey.

2017 China CEO Outlook features China findings from a global KPMG CEO survey.

The China findings from KPMG’s annual 2017 Global CEO Outlook suggest that, in guiding their companies through a period of increased geopolitical risk and a rapidly changing business environment, China CEOs are looking to step up the transformation of their companies in order to remain competitive in the market and succeed.

 

2017 China CEO Outlook – Disrupt and Grow features China findings from a global KPMG CEO survey, which gathered responses from 1,261 CEOs worldwide, including 125 from China.

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“The CEOs I speak with recognise they are operating in a rapidly changing and complex business environment. Domestically, China’s restructuring process and an increasingly sophisticated consumer are leading to both challenges and opportunities, and CEOs are responding to this by embracing technological disruption to innovate their production and distribution models, as well as to create new products.”

Benny Liu
Chairman, KPMG China

China CEOs’ confidence in the growth outlook compared to global peers

China
Global economy
54%
Company
90%
Global (ex China)
Global economy
69%
Company
82%

Top growth initiatives over the next three years

China

 

Global (ex China)
64%
Focusing on innovation, including new products/services, and ways of doing business
45%
62%
Increasing penetration in existing markets
52%
47%
Penetrating new verticals
30%
12%
Expanding into new geographical markets
22%
11%
Vertically integrating the supply chain
22%

Investment plans over the next three years

Will maintain a high level of investment in:

Technological disruption is the ‘new normal’

80%

Most China CEOs expect major disruption in their respective sectors over the next three years as a result of technological innovation, compared to less than half of their global peers.

75%

3 in 4 China CEOs see technological disruption as more of an opportunity than a threat.

70%

Most China CEOs say that their companies are actively disrupting their sectors, rather than waiting to be disrupted by competitors.

Top five risk concerns for China CEOs

1 Emerging technology risk 44%
2 Regulatory risk 36%
3 Operational risk 35%
4 Cybersecurity risk 30%
5 Reputational/Brand risk 30%

China CEOs are more optimistic about the pace of globalisation

CEOs who expect the pace of globalisation – i.e. international flows of labour, ideas, capital and trade – to increase over the next three years.

China
72%
Global (ex China)
63%

Top five factors that China CEOs expect will have the greatest impact on company growth over the next three years

  2017 Ranking   2016 Ranking
Reputational/Brand risk 1st 5th
Geopolitical factors 2nd 10th
New technology 3rd 2nd
Domestic economic factors 4th 1st
New competitors/disruptors 5th 6th

Countries and regions that China CEOs are prioritising for new market growth

Top 3 countries
Australia
Australia
35%
Germany
Germany
33%
UK
UK
21%
Top 3 regions
Asia Pacific
44%
Central/South America
36%
Central Asia
34%

Note: This refers to the top 3 foreign countries China CEOs say they are prioritising among 10 'core countries'.

“Given the importance of ‘innovation’ as a growth initiative, it is not surprising that the majority of China CEOs are also looking to transform their business models through innovation and customer-focused transformation. As we would expect, changes in China’s regulatory and policy environment are also impacting the trajectory of transformation by Chinese firms.”

Vaughn Barber
Global Chair, KPMG Global China Practice

Key takeaways

China CEOs welcome ‘technological disruption’, and embrace it as a means to innovate, transform and remain competitive in the market. At the same time, they are also aware of the risks and challenges brought by technological disruption.

‘Focusing on innovation’ was selected as a top growth initiative over the next three years by most China CEOs, and their investment plans are consistent with this.

China CEOs are also more upbeat about the pace of globalisation than most of their global peers, and despite increased concerns about the effect of the geopolitical environment on their company’s growth prospects, their appetite for investing overseas remains.

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